Where Americans Tip the Most

Visitors to the U.S. are often mystified about the "right"amount to tip for service, and it turns out Americans don't agree too much either.

An analysis of tens of millions of transactions across the U.S. by payment service Square revealed that, when customers left a tip, Alaska (17 percent), Arkansas (16.9 percent), and North Carolina (16.8 percent) registered the three highest average tips for any state. Delaware (14 percent), Hawaii (15.1 percent), and South Dakota (15.3 percent) registered the three lowest.

The highest average tip for any individual city was Denver, Colorado, at 16.8 percent, followed by Chicago (16.7 percent), Tampa (16.4 percent), Atlanta (16.3 percent), and Austin (16.2percent). The nationwide average, according to Square’s data, is roughly 16.1 percent.

It's worth noting that Square’s data aren't perfect. The tips it logs are paid out not in cash, but using credit cards, which likely tempt customers into doling out a bit more cash than they would otherwise. Studies have shown that as little as a credit card insignia can lead to heftier tips (pdf). In fact, technology in general, justified or not, has been blamed for encouraging "guilt tipping."

But Square serves a number of business types in each state, including restaurants, cafes, taxi services, and small vendors—meaning that its tipping wings spread across all sorts of tipping lands. The average transaction size per state also doesn’t deviate much. And the distribution of businesses in each state is fairly similar.

Square’s data is in fact fairly in line with perceived nationwide tipping trends. "Those numbers are pretty consistent with what we’ve found," Michael McCall, a professor at Ithaca college who specializes in consumer behavior, says. "The average tip was once about 15 percent, but it’s creeping up towards 20 percent."

A bigger surprise, in fact, is Square’s data on the percentage of customers who tip at all. This varies from Illinois, where people left a little extra over 61 percent of the time, to Delaware, where fewer than 38% of transactions added a tip. (McCall had no light to shed on why the variance is so big.)

While it's tempting to look for trends that might explain the variation, it would be hasty to establish any definite links, according to McCall.

"There are certain cultural norms that develop across the country in terms of tipping," he says. "If you’re traveling through and not coming back, there’s probably less incentive to tip well." States like Delaware, for instance, that sit along major thoroughfares, likely deal with more transient customers. “But I'm not sure, for example, how much something like politics has to do with it," McCall adds. According to his research, a sense of empathy and culture of hospitality are harder to define, but would likely serve as better indicators.

So have a look at how each U.S. states tips, but be easy on drawing any conclusions.